Sunday, March 19, 2006

Connecting the Poor

March 1, 2006
Connecting the Poor
How Selling Technology in Emerging Markets Can Help Bridge America's Trade Gap
By Shamarukh Mohiuddin and Julie Hutto

Editor's Note: The full text of this policy report is available in Adobe PDF format, only. (Requires Adobe Acrobat Reader.)


American exporters have been struggling for half a decade. Even in high-technology industries, where exports grew rapidly in the 1990s, the United States has often been outpaced. Recovery will require macroeconomic policy shifts and measures to more fully open traditional export markets in rich, highly developed countries. But there are other, more imaginative options beyond either of these. In particular, the United States can begin cultivating new markets among the world's poor.

Some U.S. technology firms are already thinking in those terms. They are looking not only at high-end and maturing markets in Europe, Japan, and China's fast developing industrial sector, but also at underdeveloped regions that in recent years have been demonstrating unexpectedly high demand for technology products, especially for information and communication technologies (ICT). President Clinton recognized a similar phenomenon inside the United States when he launched his New Markets Initiative in 1999, arguing that "our greatest untapped markets are here at home" -- in poor neighborhoods, rural areas, and reservation lands, which together represent an annual income of $85 billion. Speaking of these communities' "enormous untapped potential" and applauding the "visionary" businesses already operating in them, Clinton proposed a set of incentives to spur investment and growth there.

A similar but even larger opportunity now exists abroad, in the villages and low-income urban neighborhoods where the world's 4 billion poor people live. Some new thinking about trade policy can help them speed development and join the global economy, and also help the United States begin to bridge its trade gap.

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Shamarukh Mohiuddin is a research associate in PPI's Trade, Foreign Policy, Energy & Environment projects. Julie Hutto is a Master's candidate at the Johns Hopkins University's School of Advanced International Studies (SAIS) and a former research assistant in PPI's New Economy & Technology Project.